Loans granted by the HBOS division run by former director Peter Cummings were focused on big borrowers that left the bank vulnerable to the downturn in the economy, Lloyds revealed today as it blamed its £13.4bn of bad debts on the bank it rescued last year.

In a damning assessment of the multi- billion-pound portfolio run by the former HBOS banker who retired, aged 53, on a £352,000 a year pension, Lloyds explained that the two banks had run their lending to major companies in very different ways.

Eric Daniels, Lloyds's chief executive, said the HBOS loan portfolio had had too much exposure to the property market and "lots of single name exposure".

"The dirty word in HBOS was concentration," added Truett Tate, the director of Lloyds's wholesale and international banking operations who now oversees the troubled loans. The latest figures from Lloyds show that some £9.7bn of the overall £13.4bn charge for bad debts was caused by the wholesale bank – an £8.6bn rise compared with a year ago.

Real estate loans show the biggest losses as a percentage of loans granted at 28.2% – almost a third of the original value – up from 17% six months ago. The impairment rates on corporate and commercial loans more than doubled from 3.6% to 8.9% of the total loans issued.

Cummings, a Glaswegian who had worked for HBOS since the age of 16, was well known for his loans to property companies and his willingness to keep lending when other banks were walking away after the credit crunch started to bite. In February 2008 he stunned rivals when he said he was still lending to property companies. At the time Cummings said: "Some people look as though they are losing their nerve, beginning to panic even, in today's testing real estate environment. Not us."

Cummings was not offered a job when Lloyds completed the HBOS takeover in January.

Asked whether it could be concluded that the lending approved by Cummings did not comply with his demand for a "reasonably well constructed portfolio" Daniels said: "Very clearly, looking at the impairments we've taken on the property portfolio from HBOS, that is a reasonable commentary.

"It clearly did not perform through the cycle," said Daniels.

Cummings lent more to individual customers than Lloyds would typically have done and, in addition to extending large loans, HBOS would often ask its major clients for a slice of the equity in their business. According to Daniels, the HBOS loan portfolio was "high beta" – that is, it had a high correlation to the economy.

"It was subject to the vagaries of the economy, but it was a disproportionate exposure," said Daniels.

It also explained why Lloyds surprised the City earlier this year when it began to reveal the extent of the problem loans in HBOS. When it was finalising the HBOS takeover Lloyds had been assuming that GDP would contract by 1.2% in the fourth quarter of 2008. In the event, the economy contracted much more than was forecast – by 4% – which is why the losses escalated.

"The corporate portfolios felt the impact of the adverse economic environment in the first half of 2009. The HBOS heritage portfolio is characterised by high levels of obligor concentration to riskier counterparties, many with a property related component, thereby impacting the level of the impairment charge," Lloyds said.